Business failure

Business failure refers to a company ceasing operations following its inability to make a profit or to bring in enough revenue to cover its expenses.

The most frequent causes of a crisis are that the management continued with a strategy that was no longer working for the company (54.6%), and that they lost touch with the market and their customers and did not want to adapt to changes occurring around them (51.6%).

Incorrect strategic decisions (39.4%) are often made because of the lack of a clear strategy, and they can have a significant impact on a company’s financial position in the market.

David Lidington MP, who was then Cabinet Secretary, referred to learning from the events surrounding the collapse of Carillion, for which the government as customer was not well prepared.

By ensuring contingency plans can be quickly put in place in the very rare event of supplier failure, we will be better prepared to maintain continuity of critical public services.